Banking News

NZ banking complaints up

NZ banking complaints up

(17 October 2013 – New Zealand) Complaints to New Zealand’s Banking Ombudsman had a surprise spike in the year to 30 June, according to the annual report.

The unexpected 16 percent rise in cases is detailed in the Banking Ombudsman’s annual report, showing that enquiries alone increased by a third, however the number of cases that turned into formal disputes rose only slightly.

The amount of compensation paid to customers increased from NZ$505,139 (A$445,298) to NZ$598,000, with just under a third of disputed cases resulting in a payout.

The average compensation received rose 19 percent to NZ$2018, while the highest single award was NZ$160,000.

Customers using the scheme waited an average 74 working days for their dispute to be resolved, an improvement from 82 days in the previous year.

"Although there was an increase last year, we're actually at quite relatively low levels of enquiries," said Banking Ombudsman Deborah Battell.

She said it was difficult to compare beyond the previous year, as the organisation had not previously recorded the number of phone enquiries received.

Battell said while crisis-related complaints had declined, there was a lot of public interest in the bank fees lawsuit, the introduction of anti-money laundering laws, and the axing of the National Bank brand.

The number of complaints from businesses more than doubled to 11 percent of the total, with Battell suggesting they were still feeling a "lag effect" from the global financial crisis.

She said one trend to watch was a shift away from the previous close ties between a bank's market share and the number of complaints it generated.

The big banks ANZ, ASB, Bank of New Zealand and Westpac - accounted for 82 percent of cases, even though their market share was about 88 percent.

Medium-sized banks were over-represented with 17 percent of cases, despite having a market share of 11 percent.

Battell said the changes could be due to a number of factors, including some banks improving their customer service or complaints-handling more than others.

Some banks had also chosen to make greater use of independent dispute resolution, and newer participants' customers were also becoming more aware of the Banking Ombudsman scheme.

Chairman Ron Paterson has stepped down as the scheme enters its 21st year, replaced by Auckland lawyer Miriam Dean, QC.

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